Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<p>On 17 February, it was revealed that <a href="https://www.wsj.com/articles/buffetts-berkshire-hathaway-bets-billions-on-verizon-and-chevron-11613517434" target="_blank" rel="noopener">Warren Buffett's Berkshire Hathaway</a> invested $8.6 billion in <a href="https://www.smartkarma.com/entities/verizon-communications-inc" target="_blank" data-smartkarma-citation="entities:790:1" rel="noopener">Verizon Communications (VZ US)</a>. At the end of 2020, Verizon was one of the top 10 holdings of Berkshire Hathaway. </p><p><strong>Not being able to read the mind of Warren Buffett, there are probably three main reasons why he invested billions of dollars in Verizon. </strong></p><ul>
<li>A big beneficiary of 5G services in the US</li>
<li>A defensive stock with excellent cash flow</li>
<li>Cheap valuations</li>
</ul><div class="content-highlight"><p><strong>Warren Buffett buying a big amount of Verizon is another example of a rotation into value from growth which has been evident in the stock market in the past few weeks. </strong></p></div><p>Verizon appears to be an excellent value stock with solid cash flow dynamics and these may be the key reasons why Warren Buffett invested in this stock. For the global investors searching for greater value, SK Telecom could potentially deliver even higher value than Verizon. </p><p>SK Telecom is currently trading at 4.5x EV/EBITDA (2021) multiples right now, which is 41% lower than the EV/EBITDA multiple of Verizon. The average EV/EBITDA multiple of SK Telecom is 5.0x from 2018 to 2020, which is 33% lower than the average EV/EBITDA multiple of 7.4x for Verizon during this period.</p>

On 17 February, it was revealed that Warren Buffett's Berkshire Hathaway invested $8.6 billion in Verizon Communications (VZ US). At the end of 2020, Verizon was one of the top 10 holdings of Berkshire Hathaway. Not being able to read the mind of Warren Buffett, there are probably three main reasons why he invested billions of dollars in Verizon. 
A big beneficiary of 5G services in the US
A defensive stock with excellent cash flow
Cheap valuations
Warren Buffett buying a big amount of Verizon is another example of a rotation into value from growth which has been evident in the stock market in the past few weeks. Verizon appears to be an excellent value stock with solid cash flow dynamics and these may be the key reasons why Warren Buffett invested in this stock. For the global investors searching for greater value, SK Telecom could potentially deliver even higher value than Verizon. SK Telecom is currently trading at 4.5x EV/EBITDA (2021) multiples right now, which is 41% lower than the EV/EBITDA multiple of Verizon. The average EV/EBITDA multiple of SK Telecom is 5.0x from 2018 to 2020, which is 33% lower than the average EV/EBITDA multiple of 7.4x for Verizon during this period.

Warren Buffett Invests Big in Verizon - Impact on SK Telecom

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/coupang" target="_blank" data-smartkarma-citation="entities:28425:1" rel="noopener">Coupang (CPNG US)</a> , the largest product e-commerce player in Korea, aims to raise around US$3bn in its US listing via a mix of selling primary and secondary shares. As per media reports, the company has earlier obtained investments from Sequoia, Softbank, Blackrock and Fidelity.</p></div><div><p>Coupang offers its 14.8m customers a wide range of owned-inventory selection. In addition, on its marketplace it also offers millions of SKUs sourced from over 200,000 merchants. Apart from normal e-commerce operation, it also provides its customers with: grocery offering, Rocket Fresh; logistics food delivery offering, Coupang Eats; and digital financial services, Coupang Pay.</p></div><div>
<p>I've covered various aspects of the deal in my earlier insights: </p>
<ul>
<li>
<a href="https://www.smartkarma.com/insights/coupang-pre-ipo-the-positives-fast-growth-sticky-customers" target="_blank" rel="noopener">Coupang Pre-IPO - The Positives - Fast Growth, Sticky Customers</a>, </li>
<li><a href="https://www.smartkarma.com/insights/coupang-pre-ipo-the-negatives-horrendous-data-disclosures-including-no-mention-of-ott-launch" target="_blank" rel="noopener">Coupang Pre-IPO - The Negatives - Horrendous Data Disclosures, Including No Mention of OTT Launch</a></li>
</ul>
<p>In this insight, I'll talk about the local competition and how Coupang has been fairing.</p>
</div>

Coupang (CPNG US) , the largest product e-commerce player in Korea, aims to raise around US$3bn in its US listing via a mix of selling primary and secondary shares. As per media reports, the company has earlier obtained investments from Sequoia, Softbank, Blackrock and Fidelity.Coupang offers its 14.8m customers a wide range of owned-inventory selection. In addition, on its marketplace it also offers millions of SKUs sourced from over 200,000 merchants. Apart from normal e-commerce operation, it also provides its customers with: grocery offering, Rocket Fresh; logistics food delivery offering, Coupang Eats; and digital financial services, Coupang Pay.
I've covered various aspects of the deal in my earlier insights: 


Coupang Pre-IPO - The Positives - Fast Growth, Sticky Customers, 
Coupang Pre-IPO - The Negatives - Horrendous Data Disclosures, Including No Mention of OTT Launch

In this insight, I'll talk about the local competition and how Coupang has been fairing.


Coupang Pre-IPO - Fair Bit of Competition but It's Doing Better than Most Local Peers

<p><a href="https://www.smartkarma.com/entities/coupang" target="_blank" data-smartkarma-citation="entities:28425:1" rel="noopener">Coupang (CPNG US)</a> , the largest product e-commerce player in Korea, aims to raise around US$3bn in its US listing via a mix of selling primary and secondary shares. As per media reports, the company has earlier obtained investments from Sequoia, Softbank, Blackrock and Fidelity.</p><p>Coupang offers its 14.8m customers a wide range of owned-inventory selection. In addition, on its marketplace it also offers millions of SKUs sourced from over 200,000 merchants. Apart from normal e-commerce operation, it also provides its customers with: grocery offering, Rocket Fresh; logistics food delivery offering, Coupang Eats; and digital financial services, Coupang Pay.</p><p>In this insight, we'll talk about the positive aspects of the deal.</p>

Coupang (CPNG US) , the largest product e-commerce player in Korea, aims to raise around US$3bn in its US listing via a mix of selling primary and secondary shares. As per media reports, the company has earlier obtained investments from Sequoia, Softbank, Blackrock and Fidelity.Coupang offers its 14.8m customers a wide range of owned-inventory selection. In addition, on its marketplace it also offers millions of SKUs sourced from over 200,000 merchants. Apart from normal e-commerce operation, it also provides its customers with: grocery offering, Rocket Fresh; logistics food delivery offering, Coupang Eats; and digital financial services, Coupang Pay.In this insight, we'll talk about the positive aspects of the deal.

Coupang Pre-IPO - The Positives - Fast Growth, Sticky Customers

Thematic (Sector/Industry)

<div class="content-highlight">
<p>The Asian OTT sector is one of the most attractive industries to be in the next five years. In this report, we highlight numerous major potential winners and discuss some of the most important factors impacting the OTT sector in Asia. There are three crucial trends that will impact the Asian OTT sector:</p>
<ul>
<li>A surging growth of 5G services</li>
<li>Increased consolidations and partnerships especially among the global OTTs and local content providers/OTTs</li>
<li>Greater spending on higher quality contents in efforts to improve consumer retention</li>
</ul>
<p><strong>The main purpose of this report is as follows:</strong></p>
<ul>
<li>Identify the major players (both public &amp; private) in the OTT sector in Asia</li>
<li>Specify the key trends driving the Asian OTT industry</li>
<li>Provide an initial overview of the key companies in the Asian OTT industry</li>
</ul>
</div>


The Asian OTT sector is one of the most attractive industries to be in the next five years. In this report, we highlight numerous major potential winners and discuss some of the most important factors impacting the OTT sector in Asia. There are three crucial trends that will impact the Asian OTT sector:

A surging growth of 5G services
Increased consolidations and partnerships especially among the global OTTs and local content providers/OTTs
Greater spending on higher quality contents in efforts to improve consumer retention

The main purpose of this report is as follows:

Identify the major players (both public &amp; private) in the OTT sector in Asia
Specify the key trends driving the Asian OTT industry
Provide an initial overview of the key companies in the Asian OTT industry



Private Capital Markets

<div class="content-highlight"><p><strong>According to <a href="https://www.bloomberg.com/news/articles/2021-01-06/softbank-s-son-is-poised-for-another-ipo-windfall-in-2021" target="_blank" rel="noopener">Bloomberg, </a>it reported that Coupang, the largest e-commerce company in Korea, is getting ready to complete its IPO as soon as 2Q 2021.</strong> The estimated valuation of Coupang could be at least $30 billion. Softbank invested $2.7 billion in Coupang and <a href="https://biz.chosun.com/site/data/html_dir/2021/01/07/2021010702121.html?utm_source=naver&amp;utm_medium=original&amp;utm_campaign=biz" target="_blank" rel="noopener">Softbank (Vision Fund)</a> currently has a 37% stake in the company. If Mr. Market is willing to place a $30 billion valuation on Coupang, Softbank would reap a cool $8 billion+ gain on its investments in Coupang.</p></div>

According to Bloomberg, it reported that Coupang, the largest e-commerce company in Korea, is getting ready to complete its IPO as soon as 2Q 2021. The estimated valuation of Coupang could be at least $30 billion. Softbank invested $2.7 billion in Coupang and Softbank (Vision Fund) currently has a 37% stake in the company. If Mr. Market is willing to place a $30 billion valuation on Coupang, Softbank would reap a cool $8 billion+ gain on its investments in Coupang.

Initial Thoughts on the Coupang IPO & Impact on SK Telecom (11st) Vs. Naver

South Korea

SK Telecom Co., Ltd. is a Korean mobile and telecommunications operator. The Company provides cellular voice, wireless data, and wireless internet services. SK Telecom also offers fixed line services and platform services.

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SK Telecom (SKM US)

Warren Buffett Invests Big in Verizon - Impact on SK Telecom

Warren Buffett buying a big amount of Verizon is another example of a rotation into value from growth. This may also lead to more investors...

Douglas Kim

Coupang Pre-IPO - Fair Bit of Competition but It's Doing Better than Most Local Peers

Coupang (CPNG US) , the largest product e-commerce player in Korea, aims to raise around US$3bn in its US listing via a mix of selling primary and...

Sumeet Singh

Coupang Pre-IPO - The Positives - Fast Growth, Sticky Customers

Coupang (CPNG US) , the largest product e-commerce player in Korea, aims to raise around US$3bn in its US listing via a mix of selling primary and...

Sumeet Singh

Asian OTT Wars

The Asian OTT sector is one of the most attractive industries to be in the next five years. In this Smartkarma Original, we discuss some of the...

Douglas Kim

Initial Thoughts on the Coupang IPO & Impact on SK Telecom (11st) Vs. Naver

According to Bloomberg, it reported that Coupang is getting ready to complete its IPO as soon as 2Q 2021. The estimated valuation of Coupang could...

Douglas Kim

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